No. 114, January

In December 2017, the KOF Business Situation Indicator for the Swiss private economy went up slightly. Compared to the beginning of the year, the business situation of Swiss companies has improved substantially (See G 6). The Swiss economy is ending the year in a healthy state.

Short-time work schemes are intended to prevent unemployment during recessions. So far, very few studies have provided evidence of the desired effect. A current KOF study now shows that the Swiss short-time work programme in the years 2009 to 2015 effectively prevented lay-offs. The savings in unemployment benefits are likely to have covered the direct expenses associated with short-time work compensation payments.

The world economy is on a positive path. For the time being, the global economic upswing is likely to continue until it will gradually slow down once China phases out its fiscal stimulus programme. The financial system has become more robust and the risk of a new financial crisis is limited.

The significant upturn in the global economy is also stimulating the Swiss economy. Foreign trade is benefitting from this situation. Investments in plant and equipment are also picking up. GDP is expected to expand by 2.3% in 2018 and by 1.7% in 2019. The labour market situation is improving as employment figures are going up and the unemployment rate is declining. These are the results of the current KOF Economic Forecast.